Rock, I'm not a super-bear, or even a non-super-bear. I only play the long side, so I DESPERATELY want this market to go UP!!!!!!!!!!!!!!!!!!!!!!!!!!
But, you have to keep in mind that most of these companies split multiple times during the past few years. I don't have any figures in front of me, but I bet that if you adjusted backward, i.e., "unsplit" some of these stocks, you'd find that they are still much, much higher than they were pre-bubble.
Sure, the idea of CSCO at $5 just sounds and feels ridiculous, but keep in mind that despite the fall in it's stock price, CSCO is still up 17,555.37% since it's IPO in 1990. If you had purchased one share of CSCO on IPO day for $22.25, you would now have 232.99 shares worth $3,177.97.
So, if CSCO were to lose another 2/3 of it's share price, i.e., fall from today's close of $13.64 to $4.55, it would still be up 5851.77% since its IPO. investor.cisco.com investor.cisco.com;
Now let's look at the company's income. In GAAP terms, in FY2000, they earned $0.36 per share, in 2001, they lost $0.14 per share, and in 2002 thus far, they have earned $0.05 per share.
Right now, their projected PRO-FORMA FY2002 earnings are only $0.32 per share, and for FY2003 it's $0.47 per share. earnings.nasdaq.com
What are their projected GAAP earnings for those years? WHO THE FICK KNOWS?
My point is, when you start crunching numbers on these companies you find out that just because their share price seems really low does not mean they are now undervalued, or even fairly valued. On a real earnings basis, many if not most techs are still big, fat, bloated piggies.
augie |
